FX.co ★ US 10-Year Yield Holds Rebound

The yield on the 10-year US Treasury note declined slightly to 4.26% on Tuesday after five consecutive sessions of increases. This adjustment occurred after hitting a three-month low of 5.19% on August 5th, following the latest Consumer Price Index (CPI) report, which largely met expectations. The annual headline inflation remained at a seven-month peak of 2.7% in July, with the annual core rate rising to a five-month high of 3.1%. Although the data highlighted persistent concerns among Federal Open Market Committee (FOMC) members about elevated inflationary pressures, the absence of any aggressive upside surprises led traders to bolster expectations for a rate cut in September. This anticipation of the Federal Reserve resuming its rate-cutting cycle gained traction this month, especially after the employment data showed significant downward revisions to payroll figures, challenging perceptions of a robust labor market. On a separate note, President Donald Trump extended the US-China trade truce by an additional 90 days, averting an escalation in the trade tensions.